Zitcoin has been following the project since last December, and it has finally taken shape, with an increasingly clear direction. Now that the ZTC L2 mainnet is online, it is expected that once POW (traditional mining machines can mine directly) is ready, the BTC Layer token: $ZTC will be issued.

The biggest highlight of this update is that Zitcoin has become a native Pow public chain of BTC Layer2, inheriting Bitcoin's fairness, fully utilizing the Pow mechanism, continuing Bitcoin's tradition, while also possessing the fastest transaction speed and processing capability among current L2 public chains.

What this means in simpler terms is: currently, almost all BTC Layer2s use POS mechanisms, requiring users to stake to participate, and aside from funding, miners have little to do. This is quite frustrating and is a major reason why several previously launched BTC Layer2s have failed, as there are not many loyal users. Zitcoin is different; it continues the Pow mechanism, allowing everyone to participate. If you have mining machines, you can switch networks to mine directly; if you don’t have mining machines, you can still mine using VPS, and the mining cycle is particularly long, essentially providing a long-term income.

Recent focus: Players with inscriptions can stake their ZTCY inscriptions in advance to exchange for $ZTC, allowing them to cash out as soon as $ZTC is listed (benefits for old players).
This article mainly includes the following sections:

1. Does the market really need BTC Layer2?

2. How big can the BTC Layer2 market be?

3. Current classification of BTC Layer2 projects in the market

4. What is ZTC, and what are its advantages?

5. What stage has ZTC developed to?

6. What benefits can we gain from ZTC?

1. Does the market really need BTC Layer2?
The Ordinal protocol has been revolutionary, making BTC Layer2 possible, allowing developers to expand the ecosystem on BTC just like on ETH. Technically, there are no longer barriers to BTC Layer2.

BTC has existed as a payment function for over a decade, but on-chain activity has not been very high. With the upcoming BTC halving, on-chain activity is expected to decrease further.

The lack of on-chain activity is actually harmful to Bitcoin.

Taking Bitcoin halving as an example, the current reward of 6.25 BTC per block will be halved, directly leading to a significant reduction in miners' income. If expenses exceed income, the number of miners will greatly decrease, reducing decentralization and increasing vulnerability during attacks.

There are only two solutions to avoid this situation:

• Bitcoin price increases (even if Bitcoin's price doubles, the block reward income would just balance with the current level);
• Active BTC on-chain activities bring in more transaction fees --- --- and this has already been validated by the Ordinals protocol and BRC20.

Clearly, the BTC network needs ecological empowerment. The increase in on-chain Dapps not only brings economic benefits to miners, compensating for losses after halving, but also increases the number of full nodes, enhancing network security.

2. How big can the BTC Layer2 market be?

The capital volume of Bitcoin has reached trillions, while the Bitcoin Layer2 market has yet to be activated.

(1) Bitcoin Layer2 vs. Ethereum Layer2

We can compare it to when Ethereum's market cap was around two to three hundred billion, the total value of ERC-20 tokens was also in the range of two to three hundred billion dollars. BTC is a trillion-dollar market, but the total market cap of BRC tokens is less than ten billion dollars. There is a 99-fold space between this hundred billion and a trillion, and although this gap won't be filled in the short term, it is a potential market that cannot be ignored.

Most Bitcoin Layer2 projects are just starting, and there hasn't been a true leader yet. Currently, there are over 100 projects deeply engaged in the Bitcoin Layer2 space:

(2) Valuation of BTC Layer2s

There are many comparative data in the industry regarding Layer 2, with Ethereum being the most successful. A rough example:

🔹 Ethereum's market cap is $400 billion, and Layer2s on Ethereum account for about 10% of that market cap, thus valuing around $40 billion.

🔹 Bitcoin's market cap is $1.3 trillion, which means the market cap of Bitcoin's second layer could reach $130 billion.

This is not just the author's imagination; The Spartan Group mentioned in their article "Bitcoin Ecosystem Layers: Unveiling the Trustless Financial Era" drafted in December 2023 that Bitcoin is no longer just a store of value or an asset; it is realizing its significance as infrastructure in its ever-expanding economy.

3. Current classification of BTC Layer2 projects in the market

The BTC Layer2 industry has been exploring since the concept of "Bitcoin layers" was introduced back in 2018, representing a key shift in Bitcoin's development to address its scalability challenges.

So far, "Bitcoin layers" have borrowed from Ethereum's layered architecture, forming a three-dimensional solution that covers Layer 2, Layer 3, Data layer, Application layer, etc.

Many developers are innovating on Bitcoin layers, making numerous attempts to address the inherent limitations of BTC and introducing many functionalities to the emerging Bitcoin layers.

According to incomplete statistics, by June 2024, there are over 200 BTC Layer2s either developed or in preparation. Based on their operational mechanisms, we classify BTC Layer2s into the following six types:

🔸 Type One: Bitcoin Test Chain. A product of the Bitcoin scaling debate, which led to the most serious fork of BTC, resulting in BCH (which further forked into BSV). After the fork, BTC CORE continued to maintain the BTC mainnet, but the network congestion caused by BTC's small blocks left users feeling helpless, leading to the subsequent introduction of Segregated Witness and the Lightning Network.

🔸 Type Two: Rollup. The most numerous and homogeneous. Most utilize a modular approach to deploy EVM chains, becoming new rollups, and basically all use POS consensus mechanisms.

This approach is chosen because of its low development threshold and quick start, allowing projects to be completed in a few months, leading to a wave of such phenomena.

🔸 Type Three: Multi-signature Cross-chain Bridge + EVM. This type of project is essentially the same as the second type, but innovates in the verification method. Since it still utilizes modular components for development, many projects will first establish a POS + EVM mainnet to develop the ecosystem, gradually working on the technical aspects later.

This is a model favored by capital: "make money first, then do things; make money while doing things."

🔸 Type Four: BTC L2 Solutions Based on Taproot. The main feature is the introduction of Schnorr signature algorithms + MAST contracts + the latest BTC scripting technology, each of which enhances the privacy, scalability, and composability of the blockchain. Currently, only BEVM is working on this.

🔸 Type Five: Focused on BTC Staking. This type of solution is an improvement on the second and third types, inspired by the success of Eigenlayer on ETH, with developers believing it can be replicated on BTC.

The mechanism is simple: treat BTC as a staked asset in POS, introducing a concept similar to Eigenlayer's BTC restaking. For example, Babylon. ZTC operates on a POS + POW model.

🔸 Type Six: UTXO + Client-side Validation.

Similar to Bitcoin sidechains, the UTXO + client-side validation solution, while having poorer extensibility and higher implementation thresholds, offers better security and higher decentralization, attracting more miners to participate. Currently, there are not many developers working on this single model (Nervos is working on it), but if a few unicorns emerge, the expectations could be quite high.

Each of these six solutions has its strengths, but there are still various unresolved issues.

If a project can integrate "Three" and "Six," meeting scalability needs and going live quickly while ensuring better security and decentralization, allowing miners to join seamlessly and maintaining a block time of around 1 second with TPS ranking in the top three across the network, wouldn't the prospects be much better?

4. What is ZTC, and what are its advantages?

(1) What is ZTC?

ZTC (Zitcoin) is a Layer 2 built on the architecture of "multi-signature cross-chain bridge + EVM" and "UTXO + client-side validation." It adopts a dual GAS consumption model, which helps both the BTC ecosystem and allows the native currency ZTC to achieve deflation.

• In balancing decentralization and capital efficiency solutions, ZTC introduces a new token: $ztc, adopting a mixed consensus mechanism of POS and POW. By integrating zero-knowledge proofs (ZKPs) and STARKs (ZK-SNARKs/ZK-STARKs) consensus algorithms, it improves transaction speed and efficiency (1s block time), achieving a balance between decentralization and capital efficiency. The ZTC public chain adopts a dual GAS model, with the V2 version implementing a BTC and ZTC dual GAS consumption model, allowing users to choose freely, effectively aiding the BTC ecosystem and completing the deflation model for ZTC.

• In balancing capital efficiency (scalability, verification efficiency) and security, ZTC utilizes a zkVM (zero-knowledge virtual machine) based on the Halo2 proof system to ensure synchronization between Layer 2 states and the Bitcoin main network. All Layer 2 state updates are verified by zero-knowledge proof (ZKP) validators implemented by BitVM.

In tracking and managing all Layer 2 states, ZTC employs a unified UTXO (unspent transaction output) model. Additionally, ZTC introduces a trusted oracle mechanism to ensure that only inputs/outputs with locking/unlocking scripts compliant with Layer2 protocol specifications are allowed, thus maintaining system security and stability.

ZTC transfers most transactions off-chain by introducing state channels and sidechains. This approach can significantly reduce the burden on the main chain, thereby greatly enhancing transaction speed and lowering transaction costs. ZTC will continuously optimize the consensus algorithm to ensure efficient and stable operation of the network even during surges in transaction volume.

(2) Basic architecture of ZTC

As mentioned earlier, the current BTC Layer2 is divided into six types, most of which are developed using the single model of "multi-signature cross-chain bridge + EVM."

Most utilize a modular approach to deploy EVM, using POS consensus mechanisms to become new rollups. Some projects innovate in verification methods, but overall, they will first establish a POS + EVM mainnet to develop the ecosystem, gradually working on the technical aspects later.

This is a model favored by capital: "make money first, then do things; make money while doing things." This approach is chosen due to its low development threshold and quick start, allowing projects to be completed in a few months.

ZTC, on the other hand, is built on the architecture of "multi-signature cross-chain bridge + EVM" and "UTXO + client-side validation," with the UTXO + client-side validation solution having a higher implementation threshold, better security, and higher decentralization, attracting more miners to participate.

ps: It is reported that ZTC has secured $5 million in funding.

ZTC public chain plans are as follows:

• ZTC V1 (Sidechain Version): During the launch of the V1 version, the ZTC public chain will focus on the performance, security, and usability of the sidechain. Through continuous testing and optimization, it will ensure that the sidechain meets user needs and provides developers with rich development tools and API support.
• ZTC V2 (UTXO Client-side Validation Version): The launch of the V2 version will further enhance the performance and user experience of the ZTC public chain. Through UTXO client-side validation, users can conduct transactions more quickly and securely, enjoying a smoother blockchain experience. At the same time, ZTC will continue to optimize and improve the UTXO client-side validation mechanism to ensure its stability and reliability in various scenarios.

The phased launch of the ZTC public chain is mainly to gradually validate and improve its blockchain technology, providing users and developers with a more mature and stable blockchain platform. Through the iterations and optimizations of V1 and V2 versions, ZTC will continuously promote the development and application of blockchain technology, contributing to the prosperity of the entire blockchain ecosystem.

(3) What advantages does ZTC have compared to other BTC Layer2s?

ZTC introduces many innovative mechanisms based on Layer 2 solutions, such as:

• High-performance consensus algorithm, ensuring the fastest block time of 1 second;
• Decentralized Oracle, ZTC's decentralized oracle system ensures seamless integration of on-chain data with off-chain real-time information;
• SWAP (Swap Protocol): ZTC supports the SWAP protocol, allowing users to seamlessly exchange assets on-chain without the need for third-party intermediaries.
• UTXO Client-side Validation: In subsequent versions of ZTC, a UTXO client-side validation mechanism will be introduced. This mechanism allows users to locally verify the validity of transactions, reducing reliance on centralized validation services and further enhancing system security and privacy.
• Dual GAS model: The ZTC public chain adopts a dual GAS model, with the V2 version implementing a BTC and ZTC dual GAS consumption model, allowing users to choose freely, effectively aiding the BTC ecosystem and completing the deflation model for ZTC.
• POS + POW Consensus Nodes: ZTC adopts a mixed consensus mechanism of POS and POW. POW ensures the security and decentralization of the network, while POS improves transaction speed and energy efficiency.
• Withdrawal and Force-withdrawal: In the POS phase, unlike other Layer 2s where staking means locking assets, any assets staked in ZTC can be withdrawn at any time.

The key point here is that ZTC adopts POS + POW consensus nodes, meaning that any mining machine in reality can participate in mining without needing to configure additional equipment.

(4) ZTC Token Economics

• Token Name: ZTC
• Total Supply: 23.3 billion ZTC
• ZTCY Inscription Exchange (10%): The initial 10% of ZTC will be exchanged through ZTCY inscriptions;
• Interactive Airdrop (5%): Users can earn additional ZTC rewards through interactive airdrop activities.
• POS + POW and Ecological Reward Output (50%): The remaining 50% of ZTC will be generated through POS and POW mechanism ecological rewards.

5. What stage has ZTC developed to?

In addition to the public chain, ZTC is also preparing to build a basic ecosystem to attract more developers to deploy DAPPs on the public chain, jointly building ecological prosperity.

The basic functions that ZTC officially deploys or plans to deploy include: oracle, launch platform, cross-chain, DEX…

With so many tasks, it is impossible to accomplish everything at once. The current progress is as follows:

(1) Completed

(1) ZTC Mainnet --- --- Launched

(2) Oracle --- --- Completed

(3) SWAP --- --- Opened, allowing any token to be exchanged on the platform

(4) Staking --- --- Opened (POS mining), staking can earn on-chain points, which can be exchanged for public chain tokens.

The staking function was launched for three days, and due to the "deposit and withdraw at any time" mechanism, without any media promotion for the project, relying solely on community dissemination, the TVL has reached $761,500.

ZTC staking supports basic assets such as BTC, ETH, USDT/USDC/USDE, BNB, TRX, OP, and ZTC. It also supports memecoins like DOGE, PEPE, ORDI, STAS, RATS, PIZZA, and there may be possibilities to stake runes and tokens in the future.

Staking can earn on-chain points (which can be checked at any time), and points can be exchanged for public chain tokens.

(2) Upcoming activities and functions

(1) Social task airdrop activities

(2) Token blind boxes; the official website currently does not reveal any functions, likely similar to interactive tasks, containing a set of points and some tokens;

(3) NFTs, expected to be similar to Genesis NFTs (12 zodiac concept), serving as a qualification certificate, providing task bonuses upon holding, and can also be traded in the NFT market. There are dozens of series of NFTs, each with 12 pieces.

(4) Launchpad --- --- A platform for fair sales of tokens built by the platform, with an anti-whale mechanism built-in, allowing everyone to obtain other token quotas based on fair competition.

(5) Node mining --- --- Deployable, traditional mining machines can switch over to mine, with nodes earning an additional total of 1-2% daily.

(3) Non-chain work that the project team may be doing

(1) Fundraising; ZTC has technically laid the foundation, and now it just needs to launch community interactions to bring more people in to get the flywheel turning. To attract the community, some incentives may be needed, and the project team may already be raising funds.

(2) Token listing; after the project team announces fundraising, the next step is likely to be listing, which may take about three months. By then, the airdrops we participated in will also be received, and the mining we aimed for will also be mined.

6. How can we make money on ZTC?

The above has introduced the environment and prospects of BTC Layer2, while also analyzing the basic functions and technical advantages of ZTC. Finally, we should summarize.

ZTC is still in its early stages, and the platform token $ZTC has not yet been issued or listed, which gives us many opportunities. The dividends we can participate in include:

(1) Inscription $ZTCY exchange for $ZTC tokens (recent focus)

$ZTCY is the inscription token launched during the testing phase of ZTC, with an initial mint price of 80U, reaching a peak of 10 times. Currently, 90% of the total $ZTCY has been destroyed.

Since $ZTCY can be exchanged for the platform token $ZTC, there is significant operational space here. We can buy $ZTCY inscriptions when the market experiences a significant drop, preparing for the future platform token ZTC.

(2) Staking mining

Currently, staking assets on the platform can earn points, which can later be exchanged for $ZTC airdrops (points are on-chain and verifiable).

Supported staking assets include: BTC, ETH, USDT/USDC/USDE, BNB, TRX, OP, and ZTC, as well as memecoins like DOGE, PEPE, ORDI, STAS, RATS, PIZZA.

(3) Node mining (official testing is ongoing, expected to open soon)

Traditional mining machines can switch over to mine, with nodes earning an additional total of 1-2% daily.

If you don’t have mining machines, you can use VPS to mine. This is essentially zero-cost mining, with a relatively high quota allocation and expected high returns, but with a long cycle.

(4) Pay attention to community activities

ZTC is in its early stages, and since the token has not yet been issued and the community is still small, there are likely to be many community airdrops and other interactions that we can participate in.

That concludes today's content;

ZTC official website: https://zitcoin.io/

ZTC blockchain explorer: https://ztcscan.com/